Well-Being Incentives, A Strategic Priority for Employers
Initially, well-being was centered around physical health. Annual checkups, prescription refills and general health had been the only concerns on employers' radars. However, as time progressed, a bevy of sub-categories developed beneath the “well-being” tree. According to a survey by Deloitte, well-being incentives have transitioned into a strategic priority for employers, and as a primary way to lure talented talented mothers back into the workforce.
The term “well-being” has expanded to include a range of programs aimed at protecting employee emotional and social health while boosting job performance in the process.
These incentives include:
- Flexible schedules
- Office space designed for wellness
- Reimbursement for well-being expenses
- Healthy snacks
- Employee assistance programs
- Mental health and wellness counseling
- Health monitoring or cessation programs
- Back-up daycare
According to the 2018 Human Capital Trends survey, of the programs mentioned above, having a flexible schedule is the most desired well-being incentive among employees. Notably, 86 percent of employees value a flexible schedule while only 50 percent of employers provide the option. Among the perks listed above, flexible schedules were offered the most by employees.
However, dead last on the list? Back-up daycare. That incentive was only offered by 8 percent of employers, while 53 percent of employees saw the perk as being highly valuable. For fathers that have full custody of their children, or mothers returning to the workforce after giving birth, an on-site, back-up daycare could be enough to pull talented employees into your business.
The Growing Concern
In a report detailing the Employment Characteristics of Families, the Bureau of Labor Statistics revealed that mothers with young children are less likely to participate in the labor force than those with older children. In 2018, the labor force participation rate of mothers with children under age 3 was at 59.6 percent, and the reason why shouldn’t be a mystery. A child’s youngest years are the most important time for their mothers to be in their lives.
American businesses lose an estimated $12.7 billion annually because of employees’ childcare challenges. The loss of earnings, productivity and revenue are all factored into that amount. For the employee, they risk working fewer hours, taking a pay cut or leaving the job altogether. More times than not, it is due to the inadequate health care availability or the exorbitant costs that come along with it.
The average cost of center-based daycare in the United States is $11,666 per year, or $972 a month. However, prices range from $3,582-$18,773 a year, depending on location, age and duration of care per day. The inflation rate for childcare has risen at a higher clip than the overall rate of inflation since 1990. Childcare costs appear to be on the same upward trajectory as the cost of tuition.
A Viable Solution
Currently, there are only a handful of Fortune 500 companies that offer on-site childcare. Unemployment is at historic lows and the need for a trained, committed workforce is at a premium. While employers attemp to gain a competitive, they neglect the one solution that could open floodgates of talent into their workplace.
High-quality childcare is out of reach for working families, according to the Economic Policy Institute. The average couple spends 25.6 percent of net income on childcare, and that statistic climbs to 52.7 percent for single families. The problem is that most employers generally see this as a personal issue for employees. They don't awknowledge that unreliable, or expensive, childcare forces mothers and fathers out of the labor force.
There are ways for employers to assist their employees that could ultimately lead to higher retention rates, emotional support for employees, and increased production.
- Employer-provided childcare is tax-free to the employee up to $5,000 per year, much like the tax benefit of health insurance
- Offer a dependent care flexible spending account
- Add a dependent care assistance program and help contribute to it
- Review policies that support parenting employees
- Offer on-site childcare
- Offer flextime and telecommuting
Giving working parents daily access to their child during the workday, or lightening the burden of expensive childcare costs could give employers a much-needed retention advantage.